TakeYouToTasker Posted November 3, 2012 Posted November 3, 2012 There is never an absolute expectation of repayment. If they wanted, terms of the loan could be conditioned upon proof of insurance, it wasn't. What is the incentive to not make every loan on earth if there is no worry about if the people can pay? Once again, all I'm saying is my heart does not weep given these facts for the lender. What is the incentive to loan minus the expectation of repayment? What is the purpose of debt insurance? What is the difference between secured and unsecured debt? Can a financial system survive in an environment where loans are not expected to be payed back?
meazza Posted November 3, 2012 Posted November 3, 2012 There is never an absolute expectation of repayment. If they wanted, terms of the loan could be conditioned upon proof of insurance, it wasn't. What is the incentive to not make every loan on earth if there is no worry about if the people can pay? Once again, all I'm saying is my heart does not weep given these facts for the lender. There is always the expectation for a loss. By forgiving the loan, the lender forgoes seizing the collateral and declaring the mother a delinquent borrower.
TakeYouToTasker Posted November 3, 2012 Posted November 3, 2012 (edited) There is always the expectation for a loss. By forgiving the loan, the lender forgoes seizing the collateral and declaring the mother a delinquent borrower. In the case of college loans in the US, there is an absolute expectation of repayment, as those debts are not absolved by bankruptcy. The reason for this is that the thing purchased is not a tangible asset that can be repossessed in the event of default. Edited November 3, 2012 by TakeYouToTasker
NoSaint Posted November 3, 2012 Posted November 3, 2012 In the case of college loans in the US, there is an absolute expectation of repayment, as those debts are not absolved by bankruptcy. The reason for this is that the thing purchased is not a tangible asset that can be repossessed in the event of default. I'd be curious to learn more on industry standard. Do others forgive for death? Doesn't change much in this case but still curious to learn. In the end she signed it and I won't be upset if they tell her to pay it.
IDBillzFan Posted November 4, 2012 Posted November 4, 2012 You co-sign a loan you damn well better insure the person you co-signed for. [/thread]
jjamie12 Posted November 4, 2012 Posted November 4, 2012 I'd be curious to learn more on industry standard. Do others forgive for death? Doesn't change much in this case but still curious to learn. In the end she signed it and I won't be upset if they tell her to pay it. You don't forgive the co-signer in the event of death of the borrower. Generally, by definition, the borrower would not have been able to take out the loan unless there was someone else taking on the responsibility of paying back the loan as well. For those of you who are advocating for the bank to 'just forgive the loan', you do realize that you're advocating for higher rates for everyone (in order to protect themselves for all of these 'stories' that they'll need to forgive now -- why stop at death? What about a really bad accident? What about a recession? What about any number of other issues that people have?) or just have them stop lending in this space altogether? Is that what you want? For it to be harder to get loans for college?
B-Large Posted November 4, 2012 Posted November 4, 2012 Why should the lender be on the hook for the cost of the education? They certainly can't use it either. I'm sorry she lost her son, but he was irresponsible in not insuring his debt with a life insurance policy. That was his responsibility to make sure his family wasn't emburdened, not the banks. Right... The same reason why students can't discharge student loans in bankruptcy.... Take out a loan, pay it back...
boyst Posted November 4, 2012 Posted November 4, 2012 I hate to say it but she knew what she was signing, she is obligated to pay it back. Should the Loaner drop it, sure. But, there was a contract and an obligation not just for that but to do what is right.
KD in CA Posted November 4, 2012 Posted November 4, 2012 If a person can't pay their education loans, then the bank should have the right to repossess their brain. The problem with that plan is when the bank takes title, they'd need to write those brains down to FMV and well, you know. Also a 61 year old lady with a 23 year old kid? Yeah....and? You realize that 38 year olds can still procreate, right?
RkFast Posted November 4, 2012 Posted November 4, 2012 I'm not arguing there is anything wrong with what you have just laid out. I'm simply saying, my heart does not weep for the lender here. Every time the don't borrow money you can't pay back comes out, there's the flip side to that... I wonder how you will feel that YOU are picking up the tab for these loans through higher interest rates and fees. Of should the bank just eat it?
We Come In Peace Posted November 5, 2012 Posted November 5, 2012 I wonder how you will feel that YOU are picking up the tab for these loans through higher interest rates and fees. Of should the bank just eat it?
Best Player Available Posted November 6, 2012 Posted November 6, 2012 What is the incentive to loan minus the expectation of repayment? What is the purpose of debt insurance? What is the difference between secured and unsecured debt? Can a financial system survive in an environment where loans are not expected to be payed back? \My wife died of brain cancer. She had a masters in Chem Engineering from U Conn. Even before her death the University dismissed her debt because of circumstances. I honestly believe that was standard for a student loan from a school. I also paid her debt off after her death because it was her wish and she felt someone would get screwed because of her not paying. If the person isn't insured. Sure as crap the lender is. Who friggin cares about the corporate greed culture losing a few bucks?
3rdnlng Posted November 6, 2012 Posted November 6, 2012 \ My wife died of brain cancer. She had a masters in Chem Engineering from U Conn. Even before her death the University dismissed her debt because of circumstances. I honestly believe that was standard for a student loan from a school. I also paid her debt off after her death because it was her wish and she felt someone would get screwed because of her not paying. If the person isn't insured. Sure as crap the lender is. Who friggin cares about the corporate greed culture losing a few bucks? You have my sympathy. I know, I lost my wife in a car accident when she was 33. Smart too. 4.0 for her BA. Anyway, you have my sympathy.
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